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Homelessness Soaring in the UK As People Can No Longer Afford To Pay Rent

Homelessness Soaring in the UK As People Can No Longer Afford To Pay Rent
Mon, 2/1/2016 - by Gabrielle Pickard-Whitehead

Amid the growing crisis of affordable homes in the U.K., newly released figures show homelessness has risen by almost a third since 2010. The rise has been pinned to the increasing amount of rent arrears, in which people find themselves unable to afford hefty rental payments each month.

Figures by the Department for Communities and Local Government show that the number of households becoming homeless when a tenancy comes to an end had risen by as much as 154 percent between the third quarters of 2010 and 2015. The number of renters having little choice but to sleep on the streets due to rent arrears had increased by 36 percent during the same period.

The opposition Labour Party said the figures confirmed the scale of the “stark problems” the U.K.’s private rental housing sector posed to people. “These new figures highlight the particularly stark problems people can face. Ministers need to get a grip,” said John Healey, the Shadow Housing Minister.

The homelessness charity Shelter also pins blame for increasing homelessness on the rising number of people who are being forced to leave their homes when a tenancy comes to an end because landlords are increasing the rent.

Shelter carried out its own study on the affordability of rent, which showed that one in ten parents would not be able to pay housing costs during January – and 2.5 million parents were forgoing household essentials, including food, clothes and energy, in order to pay the rent.

U.K.’s Unaffordable Private Rental Market

It’s no secret that rent is becoming increasingly unaffordable in the U.K. A separate recent study found that one in five of Britain’s private tenants could not afford to pay January’s rent out of their normal salary and have been forced to resort to credit cards, loans, overdrafts, pay day loans and borrowing from friends and family in order to pay the housing costs.

The research was compiled by the house sharing website Spareroom.co.uk, which found that 6.5 percent of 1,003 respondents surveyed said they had no way of paying their rent last month.

“January is a notoriously bad month for finances with Christmas having taken its toll on our bank balances and with 45 percent of landlords considering rent increases in 2016, the prospect looks bleak for renter,” Matt Hutchinson, director of SpareRoom.co.uk told ThisIsMoney.

A Spiraling Housing Crisis

During the last five years the number of homeowners in England and Wales has dropped by almost a quarter of a million. Britain’s lack of affordable housing is acting as a catalyst for landlords to charge eye-watering rental charges as demand for rental property has reached new heights. Unable to afford sky-high rent, Britain’s housing crisis is ultimately intensifying the nation’s homelessness problem.

Exacerbating the crisis further is the Conservative government’s move to withdraw its support for affordable rental housing. Local authority-owned social housing, which provide the last snippet of affordable homes for many in the likes of London (where the median monthly rent is now £1,400, or about $2,000), is being progressively shrunk as the not-for-profit housing associations face government pressure to sell off homes to tenants.

According to a London Assembly housing committee report, during the last decade London lost 8,000 social homes.

Prime Minister David Cameron refers to a “ladder of opportunity,” and the government aims to subsidize homeownership in a bid to shift Britain from being a nation of renters to a nation of buyers.

However, the consequences of such a move means that millions on lower incomes will not be able to afford to participate in Britain’s "Right to Buy" scheme, and the initiative will, as the Guardian writes, "bring a windfall for a privileged few at the expense of the many denied a home.”

Instead of creating a ladder of opportunity by abolishing social housing in exchange for promoting privately owned properties, Britain is seeing the opposite happen. Increasingly, many people on the lowest incomes are faced with little other option than to sleep on the streets.

Landlords are increasing the cost of rent to even less affordable levels. The new Right to Buy initiative is causing the death of social housing, which is the last bastion of affording rented homes in the U.K. And as a result, homelessness is rising as changes to Britain’s welfare system also causes people to go into arrears with rental payments.

Changes to the Welfare System are Intensifying the Crisis

The U.K. is currently rolling out Universal Credit (UC) across the country, a means-tested benefit for those of a working age on low income. UC replaces six existing means-tested benefits and sees weekly or fortnightly benefits paid as one monthly lump sum. The roll-out, however, has not gone smoothly and some claimants have been forced to wait weeks until they receive their first UC payment. Consequently many are being forced to borrow money to cover payments such as rent and are then struggling to pay it back.

The adverse effect the UC roll-out is having on many families in social housing is starkly revealed through figures obtained by the National Federation of Almos (NFA), which surveyed more than 500,000 council homes across England on rental arrears in October and November 2015.

The research showed that 89 percent of UC claimants in social housing had fallen into rent arrears. The knock-on effect of going into rent arrears can plague those on low incomes for months, sometimes years.

At a time when David Cameron and the Conservatives pledge to tackle homelessness and carry out an “all-out assault on poverty,” homelessness is spiraling in the U.K., goaded by austerity and a housing scheme that favors a fortunate minority at the expense of the most vulnerable.

 

 

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Comments

Affordable Housing is a world wide crisis. The private construction sector can't make enough money on it to satisfy their bottomless addiction to money. So the government must step in as it does with roads, highways, schools, bridges, standing army...etc, and buid it themselves. In the meantime we must reform the wealth distribution network so the top .1% of society runs everything. The world outgrew unaccountable monarchy millennia ago.

...read that..."so the top .1% of society DOESN'T run everything.
"

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